The short term solvency of a company is determined with ___ ratio

Assessment: JAMB UTME - Principles of Accounts - 2024 Subject: Financial Accounting

Question 1 Report

The short term solvency of a company is determined with ___ ratio
Answer Details

The acid-test ratio assesses a company's ability to meet its short-term obligations (due within a year) using its most liquid assets. It goes beyond the current ratio by excluding inventory from the calculation, as inventory might take longer to convert into cash to pay off debts.

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